Majority of old working people don’t have much savings so that they can retire at the age of 65. Workers approaching retirement will need to work after 65, lower their living standard or a combination of the two. This may cause strong soul searching among old people, their families and employers. Your premier senior home health care company in Ft Lauderdale.
Retirement Savings Fall Short – Let’s see the savings the baby boomers have done when they approach retirement age. Almost 30% of them have saved nothing. Those who saved, the balance was $290000 for those born between 1948 and 1953 and $ 209,246 .For those born between 1954 to 1959.
$290,000 generates annual income of $11,900 using the 4% rule for withdrawal.
Another Reality Check – Average income for new retirees for 2017 was $1460 a month, that is $29,420 a year which is very less then the retirement income goal of 70% to 80% of the pre retirement pay.
Boomers Are Unable To Make Up For The Lost Savings
Given that boomers are trying hard to make up for the lost savings and time. Actually just the opposite is happening-most of them are not even putting aside the money they should have saved all along during the early working years. Only 40% of the age 55 to 64 are contributing to retirement plans.
– The Boston College centre (CRR) shows that those who start saving at 25 years of age and want to retire at 65 should save nearly 10% of the pay. Yet only 36% of workers(55 to 64 age) save on a retirement plan at work.
– Those who start saving at 35 and retire at 65 should be saving 15% of their pay according to CRR. Yet only 18% of workers save for retirement plans at work.
These are some numbers concluding that most workers need to work longer, lower their living standards or do both.No matter if they call this a retirement crisis or a planning challenge. the reality is the same.
Game Plan- Older workers need to keep working in some way during retirement and taking care of their health. They have to cut short their living expenses which means to see what all items they can quit and still live a satisfied life. They also have to choose smartly to squeeze from their financial resources, such as Medicare, home equity, social security and retirement savings. The long life we are living has challenges for planning the retirement years.It’s not easy to live 20 to 30 years in retirement. We all have to get ready to take the written steps with proper planning and labour, to face the challenges.Like: Retirement Dynamics offers retirement community marketing, sales training and consulting for improved occupancy rates.
A Change In Benefits – Boomers don’t end up because of bad luck with the stock market, they are healthy and live longer means they are in need of larger nest eggs. But they haven’t figured out how much they exactly need. They are surrounded with confusion and discomfort in managing their own investments and it is hurting them the most.
Some don’t make enough money to save but most have not saved at all as savings is not a Priority for them. Most people don’t admit to this . Lack of savings, shifting trends in profit, and bankruptcy are contributing to a rocky future financially. Now after 2 years the social security benefits start. Increasing medical costs are also not helping. According to the study 20% of their income is spent on medical expenses.These increased responsibilities result in three times the rate for bankruptcy filing in older Americans than in 1991.
According to Holeman recommendation boomers who still want to retire should follow three steps –
- Create a Plan – a plan consisting of small goals which can be achieved and help you view the finish line and encourage you to stay on track. Start finding out and decide how much is needed for you to retire comfortably.
- Strategy to Execute – Now calculate how much is needed to be saved per month or year to maintain balance. Plan to save the amount.
- Be Creative – Decide to retire later or do part time or downsize your home or move to a low cost living. This will help to get retirement savings on track.